Will New Jersey Eventually Criminalize Online Social Casinos?

11/28/2023
Industry
Online Casino New Jersey

Highlights

  • Virtual Gaming Worlds is leaving Michigan via Chumba, LuckyLand, and Global Poker.
  • It is unclear if the NJ Division of Gaming Enforcement is investigating social casinos.
  • Social casinos operate via sweepstakes laws to get around iGaming regulations.

In select states like New Jersey, players can access real-money gaming via licensed casinos. There are social casinos or sweepstakes gaming sites in other states where iGaming is not allowed. These sites function based on sweepstakes laws and offer free gaming. Michigan is another state where real money casinos are allowed, and lawmakers are now taking action against social sites, stating they are illegal gaming. Will New Jersey casino officials try to do the same?

Virtual Gaming Worlds Pulls Out of Michigan 

In Michigan, just like in New Jersey, lawmakers have legalized online casino sites. Operators must be partnered with a land-based casino and have licensing to operate. Social casino sites do not adhere to these rules and function via sweepstakes laws, offering Gold and Sweeps coins for gaming. The coins are free upon signup, but once players run out, they must purchase more, which is how the brands make money.

In Michigan, the Attorney General is ready to take action against the sites, calling the operations ‘illegal gambling.’ Virtual Gaming Worlds is now in the process of shutting down LuckyLand Slots, Chumba Casino, and Global Poker.

The company’s casinos operate in all states except for Idaho and Washington. Now, Michigan is on the list due to the recent comments by AG Dana Nessel. The Attorney General shut down Golden Heart Games last month, another social casino site that she said is illegal gambling.

Virtual Games World obviously saw that a shutdown was coming, so the brand decided to remove its services. In a press release, Nessel stated that unlicensed gaming robs the schools and government of essential funding and leaves the consumers participating in the games unprotected.

Will New Jersey Follow Suit? 

Now that Michigan is acting against the social casino sites, will New Jersey iGaming operators do so as well? Social casinos are like real money sites, but they use digital currency and do not require players to deposit cash to play. Users can purchase the digital currency and then redeem any prizes from certain coin types to earn prizes.

Social casinos are quite popular in states where real-money gaming is not allowed. However, in New Jersey, players have access to many top-rated brands like BetMGM, DraftKings, Caesars, FanDuel, and more. Are social casinos threatening these operators, or do they merely exist in the state?

It is unclear if the Division of Gaming Enforcement in New Jersey is investigating the matter. A statement has not been made, but we imagine that action will eventually be taken. If Michigan successfully removed the sweepstakes gaming sites, then New Jersey would benefit from taking the same stance.

Will Social Casinos Eventually Shut Down? 

Will other states follow suit if Michigan and New Jersey take action against social gaming sites? Will it lead to a reexamination of social gaming in the United States? Social casinos are big business and provide an alternative to real-money gaming in dozens of states nationwide. If legal action is taken, would it shut down the industry as a whole?

There are already lawsuits against the operators of social casino sites for legal reasons, so this may be yet another blow to the industry. Players from several states have current lawsuits in court that state the services are illegal and cause damage to players, such as gambling addiction. It is unclear which side will win the suits, but it is yet another negative on the side of the social gaming sites.

For now, players in New Jersey are better off playing via real money sites by top-rated providers. Look for name brands when enjoying iGaming to ensure you are playing games at a verified and licensed operator in the state.

Having started in 2005 as an online writer, Sadonna has focused on the online gambling industry, with a keen knowledge of various subjects. Sadonna has followed the growing US-based gambling industry for decades, covering all the legal changes in the nation as well as information on land-based and online casinos. She enjoys updating fellow gamblers on new games, casino bonuses, and additional information for premium gaming services. In her spare time, Sadonna loves spending time with her family and singing on Smule. Sadonna hopes to continue working in the online gambling industry and building quality articles for players to learn more about the US market.